Texas Non-Profit Helps Felons Start Their Own Businesses

The Prison Entrepreneur Program (PEP), a Texas-based non-profit formed in 2004, assists inmates convicted of felonies to prepare for life after prison by developing skills and character, finding post-release employment, and eventually making a success with their own businesses.

The group’s current CEO Bryan Kelley is a program graduate. Nearly finished serving a 20-year sentence for murder (for what he describes as a drug deal gone bad), Kelley had been approved for release on parole but asked authorities if he could remain behind bars for nine more months to participate in PEP.

He describes that decision as “a no-brainer,” since the nine months would bring him not just valuable training, but also access to a support network beyond what he could get even from a graduate school, making the extra time in prison a small price to pay, compared to the nearly 20 years he’d already been incarcerated.

Inmates wanting to join PEP are screened with a 10-page questionnaire and interviews. The program offers a demanding nine-month program that draws on business executives who volunteer as mentors and instructors in business and financial subjects.

During the program, participants learn to develop and present business plans, gain skills equipping them to find employment quickly after release or prepare them to launch their own enterprises.

PEP begun after a female venture capitalist during a prison visit was impressed by the high level of interest in the business world she found inmates had, as well as the street-smart business sense. As Kelley recounts it, inmates’ previous experience had given them understanding not only of such business fundamentals as profits and collections, but also more sophisticated concepts like supply chains, risk management, and marketing.

During the program’s first three months, PEP participants are advised by executives who volunteer on skill-building exercises, then move on to understanding and devising business plans and acquiring knowledge of business methods and personal skills such as public speaking.

Equipped with PEP training, current program graduates typically find employment within 17 days of gaining their release, at an average hourly rate of $12.70. During the 14 years, PEP has been in existence, its graduates have started over 360 businesses, at least five of whose annual revenues reach $1 million.

Today, according to Kelley, PEP graduates have about a 7.5% recidivism rate, compared to the rates elsewhere of 60% and up.

Over the past 14 years, about 18 percent of PEP graduates have started around 360 businesses, and Kelley said five of the businesses have annual revenues of more than $1 million each. The business training has helped other graduates to land jobs.

Kelley said currently, released PEP participants typically find employment within about 17 days at an average rate of $12.60 an hour. The Texas program, now in three men’s and one women’s prison, aims to enroll 1,200 inmates this year, and estimates between 500 and 600 of them will graduate.

PEP finds training and employment help graduates avoid re-offending; only about 7.5% of its graduates are charged with another crime within three years, compared with recidivism rates elsewhere ranging at 60% or higher. The program has received inquiries from other states interested in adopting the program. That expansion could begin as early as next year.